Council plans $15 minimum wage in five years

A public hearing on the draft ordinance is June 22

The City Council has a plan to raise the minimum wage for all Minneapolis workers to $15 by July 1, 2022.

Several of the key remaining details of a municipal minimum wage ordinance were sketched in by council members during a special June 6 Committee of the Whole meeting, including the timing and pace for phasing-in higher wages. Those were some of the last missing pieces in the proposed ordinance, which is set for a vote following a public hearing later this month.

Under the plan described by City Council Vice President Elizabeth Glidden (Ward 8), the ramp-up to a higher minimum wage would move more quickly at large businesses — those with more than 100 employees — than smaller businesses, where the wage floor would rise more slowly and then take a larger jump in the fifth year of implementation.

More than 90 percent of Minneapolis businesses — and 88 percent in the foodservice category, including bars and restaurants — have 100 or fewer employees and would fall into the small business tier. Together, those business employ about 110,000 of Minneapolis’ estimated 301,820 workers, or just over 36 percent of the workforce.

About 71,000 Minneapolis workers currently earn less than $15 an hour, according to a city report. Latino and African-American workers are disproportionately represented in those low-wage jobs and would stand to benefit from a hike in the minimum wage.

Council members had previously agreed that a tiered implementation system was the best way to ease the burden of rising wages on small business owners, but when they instructed staff to draft a municipal minimum wage ordinance in May, they didn’t say where to draw the line. The draft ordinance returned to the council in June didn’t answer the question; it was a policy issue that had to be settled by the council.

Glidden said drawing the line at 100 employees was “not a perfect differentiator,” but she and the co-authors of the proposal, council members Lisa Bender (Ward 10) and Abdi Warsame (Ward 6), weighed a number of choices and decided it was the best option. The majority of municipal minimum wage laws enacted around the country so far do not treat small and large businesses differently, Glidden said.

Bender said she aimed to make the ordinance simple and easily understandable for both workers and employers and to get as many people to $15 as quickly as possible. Bender said she aimed for a policy that didn’t “leave behind” too many workers, but also responded to calls from small business owners who wanted more time to adjust to rising payroll costs.

Ward 2 City Council Member Cam Gordon said he preferred a plan that got large businesses to $15 in four years, but said having both small and large employers arrive at that point in five years — rather than giving small businesses a 6- or 7-year phase-in period — “is a plus” for the Glidden proposal. Gordon said he may still propose an amendment to the ordinance that would lower the dividing line between small and large businesses, so that more workers might benefit from the ordinance sooner.

Under the proposal, the Minneapolis Department of Civil Rights is charged with enforcing the ordinance. The City Council approved an amendment authored by Jacob Frey of Ward 3 to allow for individuals to sue in the case of ordinance violations.

The draft ordinance was cheered by 15 Now Minnesota, a group that attempted to enact a $15 minimum wage via charter amendment last fall. That effort was blocked by the Minnesota Supreme Court, ruling that the minimum wage was a matter of policy that had to be handled in ordinance and not the charter.

Others are still pressing the council to include an exception for tipped workers in the minimum wage ordinance, including Pathway to $15, a group that represents dozens of local restaurant owners. Pathway to $15 advocates what is alternately called a tip credit or a tip penalty — in either case, it allows restaurants to count tips toward the wages of servers and bartenders.

The group argues that many tipped employees already make more than $15 when wages and tips are combined and that requiring a $15 minimum wage would force restaurants to lay-off employees, switch to counter service or even close.

A public hearing on the ordinance is planned for June 22. Comments may be submitted in person or via email to minwage@minneapolismn.gov. The council meets June 28 to make final revisions to the ordinance ahead of a June 30 vote.